Market Snapshot for SPY - Jun 16th 2008

cf. ER2 post below for guidance.

Market Snapshot for NDX - Jun 16th 2008

cf. ER2 post below for guidance

Market Outlook ER2 (RUT) for Jun 16th '08

We've seen some waves of buying over the last few days, so one may want to switch to lower time frames should one wish to catch optimal entry/exit points.


Dominant TF: all 3
Swings: UP-UP-UP
Market Direction(daily): up, congestion at first
Position (60mins): flat to long
Options (RUT):
Short Jun790 Calls, Long Jun800 Calls OR
Short Jun830 Calls, Long Jun840 Calls for those who opted for safety 2 weeks ago

Over the last few days, we've seen the 719 MM pivot level acting as support. The bounce was even strong enough to quickly reach Fib PR1.

As a note: some have misunderstood Friday's comments on SPY "We've seen some waves of buying over the last few days, so one may want to switch to lower time frames should one wish to catch optimal entry/exit points." Even if the bounce was stronger than anticipated, the point was to go to lower time frame to catch a decision point. Some would have bought at that lower time frame, some would however try and get a better short re-entry point. Exact entry/exit signals would go beyond the scope of this blog. Please contact me for more info.

60mins: mild upward retracement
ER2 has almost hit Fib PR1 after bouncing on MM level. MTFS could indicate ER2 creeping a little higher but this is unlikely. We'll keep an eye on a shorter time frame (10mins) where 734 is a strong MM resistance level which will certainly be tested vigorously but should hold.

Daily: entering a trading range
Despite the up day on friday, ER2 remains slightly bearish so a congestion or trading range is likely. Such trading range is [719:750] itself split in 2 halves. MTFS and a mild negative Entropy indicate that ER2 should remain in the lower part [719:734].
We correctly mentioned last time that the 719 support level hold and we still think so.

Weekly: up recovery is still valid for the time being
Similarly to the Daily TF, ER2 is here slowing down near resistance level. As mentioned on other symbols, the eventuality of a pivot level around last highs (765) makes this configuration crucial as a Fib pattern can develop both ways in the coming months. For the time being, the current situation is fine for theta players and the bearish scenario is still quite remote.